Federal Genetic Testing Fraud Prosecutions
Welcome to Spodek Law Group. Our goal is to give you the reality of federal genetic testing fraud prosecutions - not the sanitized version law firm websites present, not the "work with investigators" fiction, but the actual truth about what happens when the Department of Justice decides that your signature on genetic testing orders makes you a co-conspirator in a multi-million dollar fraud scheme.
If you're reading this at 11pm because you received a target letter, because federal agents showed up at your practice, or because a colleague just got indicted and you worked with the same lab - you need to understand something that nobody is telling you: The federal government is not investigating the laboratory. They're investigating you.
The 2025 National Health Care Fraud Takedown charged 324 defendants. That number includes 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals. Not lab owners. Not marketers. Licensed professionals who thought they were doing telemedicine consults. The intended loss in that single enforcement action exceeded $14.6 billion - more than double the previous record set in 2020. This is not a crackdown. This is a permanent priority. And the target on medical professionals has never been larger.
The $30 That Cost a Decade
Heres the thing nobody explains about genetic testing fraud prosecutions. The amount you received per order doesnt determine your sentence. The pattern does.
Dr. Daniel Canchola practiced in Texas. From August 2018 through April 2019, he signed orders authorizing durable medical equipment and cancer genetic tests for patients he never saw, never spoke to, never examined. His payment? Thirty dollars per order. Thirty dollars. The kind of payment that feels like paperwork compensation, not criminal conspiracy. Over those months, those thirty-dollar payments added up to aproximately $466,000 in kickbacks.
In October 2024, Dr. Canchola was sentenced to ten years and one month in federal prison. He was ordered to pay over $34 million in restitution - joint and several liability with co-defendants for a scheme totaling $54 million.
Let that sink in. Thirty dollars per signature became a decade in prison and liability for tens of millions he never personally received.
The federal sentencing guidelines for healthcare fraud dont care that you werent the mastermind. They care about the total loss to federal programs. They care about your role in the conspiracy. And heres were the trap closes: when you signed those orders, you became the necessary ingredient. Medicare cant be billed without a physician or mid-level provider's authorization. Your signature wasnt paperwork. It was the crime.
Dr. David Young, also in Texas, operated a similar arrangement. He prescribed genetic tests and DME for over 13,000 Medicare beneficiaries - including undercover agents posing as patients. He received aproximately $475,000 in kickbacks. His sentence? Ten years in federal prison, plus $26.6 million in restitution.
But heres the kicker. Dr. Young's defense at trial was presumably that he believed the consults were legitimate. A jury convicted him anyway. Because the pattern - the volume, the minimal contact, the per-test payments - told a story that no amount of "I thought I was helping patients" could overcome.
How Telemedicine Became a Federal Trap
Telemedicine was supposed to expand healthcare access. Thats the fantasy version. In reality, telehealth created the perfect vehicle for fraud because it eliminated the one thing prosecutors need most: evidence of actual patient contact.
Consider what happened to Scharmaine Lawson Baker, a Louisiana nurse practitioner. She signed hundreds of orders for cancer genetic testing after phone calls lasting less then sixty seconds. Less then a minute. The telehealth company paid her kickbacks for each order. She falsely diagnosed patients to justify the tests - including, the government alleged, diagnosing male patients with cervical cancer.
Think about that for a moment. Male patients. Cervical cancer. The diagnosis wasnt a medical judgment; it was a billing code. And the sixty-second calls werent consultations; they were timestamps.
The total fraudulent Medicare claims traced to her orders exceeded $12.1 million. The labs she worked with received over $1.5 million in reimbursements for tests that were, by definition, medicaly unnecessary. You cant need a cervical cancer screen if you dont have a cervix.
OK so heres what nobody tells you about telemedicine in the genetic testing context. The DOJ has pattern recognition software that analyzes billing data. When your consult times average under two minutes, when your order volume exceeds what any legitimate practice could generate, when the same lab pays you for every specimen - the algorithm flags you. Not the lab. Not the marketer. You.
At Spodek Law Group, we've seen this pattern in case after case. The provider thinks theyre doing quick but legitimate telehealth. The marketer thinks theyre just connecting patients with services. The lab thinks theyre just processing specimens. But the DOJ sees a conspiracy with three essential players - and the one with the medical license is the easiest to convict.
Why? Because juries understand that doctors should know better. The license that protects you with patients destroys you with jurors.
What Willful Blindness Means for Your Defense
If your planning to defend yourself with "I didnt know it was fraud," you need to understand something before you talk to anyone. That defense has been legally eliminated.
Federal courts recognize a doctrine called willful blindness. It works like this: if the government can prove that you were aware of a high probability of illegal conduct, and you deliberately avoided confirming that probability, the law treats you as if you actually knew. The "I didnt look, so I didnt know" defense isnt just weak - its an admission.
Heres how this plays out in genetic testing fraud cases. The marketer approaches you with a "partnership opportunity." Guaranteed patient volume. No overhead. Payments per test. You dont ask who's paying. You dont ask why Medicare beneficiaries are seeking cancer genetic tests from a telemedicine provider theyve never met. You dont ask why the "processing fee" you receive happens to correlate exactly with the number of tests ordered.
You didnt ask because you didnt want to know. Under willful blindness, that deliberate ignorance equals knowledge.
In the jury instructions, the judge will explain that the government doesnt have to prove you knew every detail of the scheme. They just have to prove you deliberately closed your eyes to the obvious. And when the government shows that you received thousands of dollars in payments structured around test volume - payments that any reasonable medical professional would recognize as kickbacks - youve just proven their case.
This is why Todd Spodek tells clients that the first call to law enforcement is the last chance to shape the narrative. Once the investigation moves forward, once the subpoenas issue, once your billing records are in the hands of the Health Care Fraud Unit - your defense options narrow dramaticaly. What you say in the first 72 hours matters more then what your lawyer argues at trial, because by trial, the willful blindness instruction has already destroyed your "I didnt know" defense.
The Exclusion That Outlasts Prison
Everyone focuses on prison time. And yes, the sentences are devastating - seven, ten, sometimes twenty years or more. Minal Patel, the lab owner behind a $463 million genetic testing scheme, received 27 years in federal prison. Thats effectivley a life sentence.
But heres the part nobody mentions: prison is the temporary punishment. Exclusion is permanent.
HHS-OIG has the authority to exclude individuals from all federal healthcare programs - Medicare, Medicaid, TRICARE, the VA system. This exclusion is administrative, not criminal. It doesnt require a conviction. It can follow an acquittal. And it follows you personally for life.
Read that again. You can win at trial and still lose your career.
If your excluded from federal programs, you cant bill Medicare. You cant work for any entity that bills Medicare. You cant be a partner in a practice that bills Medicare. You cant consult for a hospital that bills Medicare. In modern American medicine, exclusion is professional death.
And the exclusion happens through an administrative process with diferent rules then criminal court. The standard of proof is lower. The right to discovery is limited. The ability to challenge is constrained. Practitioners who beat federal charges have lost their livelihoods to the exclusion that followed.
Notice the pattern? Look, the criminal prosecution destroys your present. The exclusion destroys your future. And they run on paralel tracks - fighting one doesnt protect you from the other.
Why Your License Makes You a Target
Most medical professionals assume their license protects them. Theyve worked for years to earn credentials. They have clean records. They follow the rules. Surely a jury will see them as the professional who got deceived, not the criminal who participated.
This assumption inverts the prosecutorial reality.
Your license makes you more culpable, not less. The "should have known" standard applies to licensed professionals with unique force. A random marketer might claim ignorance of healthcare billing regulations. A lab technician might claim they just processed specimens. But you? You went to medical school. You studied ethics. You know that referral arrangements with payment-per-test structures violate the Anti-Kickback Statute. You know - or should know - that ordering tests without clinical evaluation is fraud.
The government doesnt need to prove you specifically intended to defraud Medicare. They need to prove you knew the arrangement was improper and participated anyway. Your license creates the presumption that you understood the rules. Your participation creates the inference that you broke them intentionaly.
Heres were it gets interesting. The Medical Service Organization structures that many labs use to "manage" physician relationships are being systematicaly unraveled by the DOJ. If you invested in an MSO that paid you "management fees" in exchange for referrals, you didnt just receive kickbacks - you invested in the scheme. Thats not a witness. Thats a co-conspirator with profit motive.
If any part of your compensation from a genetic testing relationship correlates with volume of tests or specimens, you have a potential Anti-Kickback Statute exposure that no amount of paperwork restructuring can eliminate. The government has seen every structure. Every MSO arrangement. Every "consulting agreement" that happens to pay exactly when tests are ordered. They know what youre doing even if you convinced yourself it was legitimate.
The Investigation You Dont Know About
Theres a phenomenon in genetic testing fraud prosecutions called "The Doctor Chase." Heres how it works.
Marketers need doctors. Without a physician or mid-level provider's signature, they cant bill Medicare. So they recruit aggressivley - cold calls, conference booths, referral fees disguised as processing payments. If a marketer ever approached you with a high-volume genetic testing opportunity, your name is in their files.
And heres what nobody tells you: when the lab gets investigated, those marketer files become government evidence.
The DOJ doesnt announce investigations. You dont receive a courtesy call explaining that your referral relationship is under scrutiny. Instead, the government quietly subpoenas the lab's records - including the list of every provider who ordered tests and every payment that went out. They subpoena the marketing company. They subpoena the specimen logistics firms. By the time you learn about the investigation, theyve already mapped your entire relationship with the scheme.
Think about that. Right now, you might be named in government documents as a "subject" or "target" of an investigation - and you dont know it. The first indication might be agents at your door. It might be a grand jury subpoena. It might be your colleague's indictment naming you as a co-conspirator.
At Spodek Law Group, we've represented clients who had no idea they were under investigation until they received target letters or watched colleagues get arrested. The investigation timeline in these cases often spans years. The government builds the case methodicaly, following the money from lab to marketer to provider. They dont need your cooperation to charge you. They have the billing records.
If you've ever received per-test payments from a genetic testing laboratory - directly or through any intermediary - assume the relationship is documented and potentially under review. The question isnt whether theyre investigating the lab. The question is whether theyre investigating you.
What Actually Happens in the First 72 Hours
If federal agents show up at your practice or home, the clock starts immediately. What happens in the first 72 hours determines the trajectory of your case more then anything that follows.
Heres the reality. Your first instinct will be to cooperate. To explain. To show them youre not a criminal. This instinct is the trap.
Everything you say becomes evidence. The agents are not there to clear your name - theyre there to build their case. Every explanation you offer, every document you point to, every contact you suggest they interview - all of it goes into the government's file. And unlike what you see on television, there's no moment where you convince them of your innocence and they apologize and leave.
Full cooperation does not prevent prosecution. We've seen it over and over. Clients who talked freely, who provided documents voluntarily, who named other participants thinking they were helping themselves - charged anyway. The cooperation might help at sentencing. It might be a factor the judge considers. But it doesnt stop the indictment.
In the first 72 hours, you need three things. First, a lawyer who understands federal healthcare fraud specifically - not a general criminal defense attorney who handles "white collar" cases, but someone who knows the Anti-Kickback Statute, the False Claims Act, the HHS-OIG enforcement patterns. Second, immediate assessment of your actual exposure - which requires reviewing every genetic testing relationship, every payment received, every documentation gap. Third, a strategy for engaging with the government that protects your rights while preserving potential cooperation benefits.
What you should not do: provide voluntary statements, consent to searches, contact co-conspirators, destroy or alter documents (that's obstruction and creates separate charges), or assume your malpractice insurance covers criminal defense (it almost certainly does not).
The window for effective intervention closes fast. Once your in the grand jury's sights, once the indictment issues, your options narrow to plea negotiation or trial. Neither is pleasant. Both are better approached with preparation that started in those first hours.
The Path Forward When There Is One
Not every genetic testing arrangement is fraudulent. Not every investigation ends in charges. Not every charge ends in conviction. There are defenses - legitimate telehealth practices with documented clinical evaluations, referral arrangements that satisfy safe harbor provisions, payments that reflect fair market value for actual services rendered.
But those defenses require evidence. Documentation. Contemporaneous records showing that each patient encounter involved genuine clinical judgment. If that documentation exists, your defense has foundation. If it doesnt, your "I was doing real medicine" claim is just words against the government's data analytics.
As Todd Spodek explains to clients facing these situations: the time to build your defense was before the investigation started. But the second-best time is right now - before you talk to anyone, before you produce documents, before you make statements that become evidence.
The federal government charged 324 defendants in the 2025 takedown alone. Of those, 96 were licensed medical professionals. The conviction rate in federal healthcare fraud cases exceeds 90%. These are not statistics designed to terrify you - though they should. These are the numbers that define your reality.
If youve been contacted about a genetic testing investigation, if youve received a target letter or subpoena, if you have reason to believe your referral relationships are under scrutiny - call us at 212-300-5196. Not tomorrow. Now.
The clock that started when the lab got investigated doesnt pause while you figure out what to do. Every day of delay is a day the government is building its case against you.
They've had years to prepare. You have days to respond. How you use those days determines whether this becomes the worst chapter of your life or the one you survived because you acted in time.
